Does Medical Debt Affect Your Credit Score in 2026?

A timeline of what changed and when

To understand where things stand in 2026, it helps to see how quickly the rules evolved.

July 2022: Paid medical debt removed from reports

Equifax, Experian, and TransUnion voluntarily agreed to stop reporting paid and settled medical debt. Any medical collection that a patient had already paid was supposed to disappear from credit reports. This change happened without a federal rule requiring it — the bureaus made the change in response to pressure from the CFPB and growing research showing that medical debt was an unreliable predictor of creditworthiness.

March 2023: The one-year waiting period

The three bureaus also agreed to extend the waiting period before an unpaid medical collection could appear on a credit report from six months to twelve months. This gives patients more time to work with their insurer or the hospital's billing department before the collection shows up and damages their score.

Early 2025: The CFPB finalizes a rule banning small medical debt

The Consumer Financial Protection Bureau finalized a rule in early 2025 prohibiting credit bureaus from including medical debt under $500 on consumer credit reports. This represented the most significant federal action on medical debt and credit reporting in decades.

Ongoing: Fannie Mae and Freddie Mac updates

In 2023, both government-sponsored mortgage enterprises updated their automated underwriting systems to exclude medical collections from calculations. For prospective homebuyers, this means medical collections that still appear on a report carry less weight in the mortgage approval process specifically — though individual lenders may still review them.

The under-$500 rule explained

The CFPB's 2025 rule changed the floor for reportable medical debt. Here is what it means in practice.

What the rule prohibits

Consumer credit bureaus — meaning the three major nationwide bureaus and most specialty reporting agencies covered by the Fair Credit Reporting Act — cannot include a medical debt collection on a consumer's credit report if the original balance was under $500. New collections under that threshold cannot be added. Existing ones should have been removed.

What counts toward the $500 threshold

The threshold applies to the amount of the medical debt, not the collection agency's fees or interest. If your original medical bill was $350 but the collection agency added fees bringing the total to $550, you should verify how the rule applies to your specific situation — and consult a consumer law attorney or credit counselor if needed. BillBusted is not a law firm and cannot give legal advice.

If a small medical collection is still on your report

Dispute it. Under the FCRA, you have the right to dispute inaccurate or improperly included information on your credit report. If a medical debt under $500 is still showing up after the 2025 rule took effect, that is improper and you can file a dispute with each bureau that shows it.

What the three major credit bureaus now do

The paid-debt removal policy

All three bureaus committed to removing paid or settled medical collections. If you pay a medical bill that was in collections, the collection entry should be removed — not just updated to "paid collection." A paid collection that remains on your report is a dispute you can and should file.

The 12-month buffer

New medical collections will not appear until the debt has been unpaid for at least one year. This buffer gives you meaningful time to navigate insurance disputes, billing corrections, or financial assistance applications before the collection does any credit damage. Do not ignore a medical bill in collections — but you do have a 12-month window before it affects your report.

What the bureaus still report

Unpaid medical debts over $500 that are more than 12 months old can still be reported. If you have a significant medical debt in collections that meets those criteria, it may still appear on your report and affect your score — though the impact varies significantly by scoring model.

The 2025 CFPB rule: what it covers and what it does not

What the rule covers

The rule applies to consumer credit reports used in decisions about credit (mortgages, auto loans, credit cards), housing (rental applications), employment in some states, and insurance. It covers the major bureaus and most consumer reporting agencies that produce credit reports under the FCRA.

What the rule does not cover

The rule does not stop a provider or collection agency from trying to collect medical debt. It does not cancel the debt. It does not apply to every type of screening — some tenant screening reports, for example, may not be covered by the same rules as credit reports. And it does not prevent a provider from suing to collect unpaid debt. The rule specifically limits credit reporting, not collection activities.

Status in 2026

As of publication in May 2026, the rule is in effect. However, regulatory rules can be challenged or modified over time. BillBusted recommends checking the CFPB website directly for the most current information about this rule, particularly if you are making a financial decision that depends on it.

How scoring models treat medical debt differently

Even when medical debt does appear on a credit report, not all scoring models treat it the same way as other types of debt.

FICO Score 9 and newer

FICO Score 9, released in 2014, significantly reduced the weight of paid medical collections in the score calculation and treated unpaid medical collections somewhat differently from other types of unpaid debt. FICO Score 10 continued this approach. However, many lenders still use older scoring models (FICO Score 8 or earlier), which do not make this distinction.

VantageScore

VantageScore 4.0 introduced a similar approach, weighting medical debt collections less heavily than other collection types. VantageScore models are increasingly used by lenders, which means the real-world credit impact of medical debt has been declining even for debt that still appears on reports.

Practical implication

If you have an unpaid medical collection over $500 on your report, the score impact depends significantly on which model your lender uses. The impact is likely lower than a similarly sized non-medical collection — but it is not zero for older scoring models.

What to do if medical debt appears on your report

Pull your credit reports first

You can access your credit reports from all three bureaus for free at AnnualCreditReport.com. Review each report carefully for medical collections, including whether the amount, the date, and the creditor name are accurate.

Dispute with the bureau

If a medical collection appears that should not — it is paid, under $500, or factually inaccurate — file a dispute with the relevant bureau online, by mail, or by phone. The bureau has 30 days to investigate and must remove or correct information it cannot verify. Keep copies of your dispute and any response.

Dispute with the furnisher

You can also send a dispute directly to the collection agency or provider reporting the debt (the "furnisher"). Under the FCRA, furnishers must investigate disputes and correct inaccurate information they report. Send disputes by certified mail with return receipt so you have proof of receipt.

Contact the CFPB if bureaus do not comply

If a bureau does not remove information that violates the new rules, you can file a complaint with the CFPB at consumerfinance.gov/complaint. The CFPB has enforcement authority over major credit bureaus and takes medical debt reporting violations seriously.

The billing error problem: why disputing the bill matters too

Here is something that gets lost in conversations about medical debt and credit: a significant portion of medical bills contain errors. The CFPB has found that up to 49% of medical bills have at least one billing mistake. (Source: CFPB, 2024.) That means a portion of the medical debt sitting in collections — and affecting credit reports — reflects charges that were never valid in the first place.

What this means if you have medical debt in collections

If a medical collection is on your report, you can dispute both the credit entry and the underlying bill. Disputing the underlying bill — by identifying specific errors like duplicate charges, upcoding, or codes for services not received — can result in the balance being reduced or eliminated, which in turn affects the collection. If the balance drops to zero, the collection should be removed from your report.

Getting an itemized bill even if the debt is in collections

You still have the right to request a CPT-level itemized bill from the original provider, even after the account has been sent to a collection agency. This gives you the documentation you need to identify errors in the original charge — errors that may make the entire collection invalid.

How to dispute a bill that has errors and is in collections

Send a written dispute to the original provider identifying the specific errors. Simultaneously, you can request that the collection agency verify the debt (a "debt validation request" within 30 days of first contact triggers this right under the FDCPA). If the original bill has errors that reduce the balance below $500, the collection may become non-reportable under the 2025 CFPB rule.

The compounding effect of billing errors on credit

Imagine a patient who received a hospital bill for $1,200, of which $600 represents duplicate charges. They cannot afford to pay and the bill goes to collections. That $1,200 collection appears on their credit report and affects their score for years — even though $600 of the balance was an error. Disputing the underlying bill is not just about the money; it can materially change the credit reporting outcome.

On bills above $10,000, AARP and MedCost Solutions have documented average overcharges of approximately $1,300. Catching those errors early — before a bill reaches collections — is one of the most important things a patient can do to protect both their finances and their credit. (Source: AARP / MedCost Solutions.)

Balancing debt resolution and bill accuracy

If you have medical debt in collections, the instinct is often to pay it as quickly as possible to protect your credit. That makes sense in many situations. But if you pay a bill that contains errors before disputing those errors, you may lose leverage. Consider getting the itemized bill and doing at least a basic review before making a payment — especially on larger balances.

If you need help reviewing a bill that has gone to collections, BillBusted's Full Audit ($49) can identify specific errors and generate the dispute language you need, even for accounts already in a collection process. If the errors are significant, the Done-For-You concierge service ($149) can handle the submission and follow-up for you.

You can also see our guide on how to find your hospital's charity care policy — financial assistance is sometimes available even after a bill has been sent to collections, depending on the hospital and state law.